deVere Group and Nigel Green vs. Moneyweb

Mon, Oct 30, 2017

Ruling by the Press Ombud

27 October 2017

This ruling is based on the written submissions of Mr Daniel Vale of Webber Wentzel, on behalf of the deVere Group (an international financial consultancy) and its CEO, Mr Nigel Green, and on those of Ryk van Niekerk, editor of Moneyweb.

The deVere Group and Green are complaining about an article in Moneyweb of 6 September 2017, headlined The world’s greatest Ponzi scheme that never was. The article hosted a hyperlink to an additional publication, headlined ‘Belvedere masterminds’ point fingers at Nigel Green, first published on 7 July 2015, about which they also (initially) complained.

Complaint(s)

With regards to the first article, deVere and Green complain that Moneyweb did not afford them a right of reply prior to publication as it should have, given that the article amounted to critical reportage.

They ask me to direct Moneyweb to:

· take down the text from its website; and

· publish an unconditional apology for not affording them a right of reply.

Initially the complaint was also about the hyperlinked article, as cited above. However, in its latest correspondence with this office deVere and Green withdrew this part of the complaint. I am therefore disregarding all correspondence relating to this text.

Other limitations to this adjudication:

· While I have noted the content of the correspondence between the parties prior to the lodging of the complaint to this office, I am focusing on the complaint only; and

· The issue is not whether the statements in question are true – the complaint is about one thing and one thing only (the right of reply).

The text

The article, written by Patrick Cairns, reported on the conclusion of an investigation by the Guernsey Financial Services Commission (“GFSC”) into allegations against David Cosgrove and Cobus Kellermann about a “massive criminal enterprise” or “Ponzi scheme” and that they had been involved in “rampant fraud”.

The GFSC reportedly announced that it had concluded its investigation and that no action would be taken against either Cosgrove or Kellermann.

Cairns recalled certain key events that preceded the outcome of the investigation, inter alia mentioning deVere and Green in this regard (details below).

The arguments

In general

Vale says the article incorporated extracts from press statements by Cosgrove and Kellermann which asserted that deVere and Green had “played a central role in defrauding their clients through the Strategic Growth Fund” (SGF) – which meant his clients were the subjects of critical reportage.

Van Niekerk argues:

· There is no obligation on a publication to afford any right of reply in respect of historical material referred to by way of contextual or background information only;

· The reportage related a factual report of the finding of the GFSC and as such was akin to reporting on judicial proceedings – for which there is no obligation to obtain comment from either of the sets of parties affected by the finding;

· The repeating of factual background, long in the public domain, does not amount to new allegations of fact and can therefore not be regarded as reportage (read: news);

· The article contained protected comment, as it was based on facts and fairly stated – which did not give rise to a right of reply; and

· The article did not centre on and unjustifiably criticised deVere and Green, and can therefore not be regarded as critical reportage (the text, he says, centred on a finding of the Guernsey regulator).

Vale replies that Moneyweb’s defence that the allegations were not new misses the point, and “would give licence to the media to publish allegations in the public domain with impunity, simply because they have been published before”.

He also rejects the argument that the article contained “protected comment” or any sort of comment, for that matter (which did not need a right of reply). He refers to allegations that:

· deVere and Green were engaged in a cover-up and had falsely accused Cosgrove and Kellerman; and

· Green personally received exorbitant fees.

He argues that these were “factual allegations”, which warranted a reply.

In particular

Vale refers to the following section of the article about which, he says, Moneyweb should have asked his clients for comment:

“In March 2015, international consultancy deVere went public on the fact that it had provided ‘evidence of wrongdoing’ in this fund to OffshoreAlert. A deVere spokesperson was quoted as saying that ‘we suspect that this case could turn out to be one of the largest financial scams in history’.

“However, it later emerged that the Strategic Growth Fund was actually a deVere vehicle. It was managed by United Asset Management, a firm linked to deVere’s CEO Nigel Green, and the only investors in the fund were deVere clients, placed there by deVere advisors who received large commissions for doing so.”

“In mid-2015, Cosgrove and Kellermann raised these inconsistencies in a document that questioned the role deVere and Green had played in the allegations against them. They claimed that they had been targeted in an ‘attempt to cover up the direct role that Nigel Green played in the losses to deVere Group clients and the exorbitant fees he (Green) personally received’.”

In response to Vale’s argument that these statements constituted critical reportage, Van Niekerk reiterates that they simply related “factually accurate past events” to give context to the article – hyperlinking readers to deVere’s own website where these statements were published, and to an article which did contain deVere’s response.

Analysis

In general

The adjudication of this complaint is not as simple as either of the parties would like me to believe.

Historical material

Firstly, both sides have a point, at least to some extent:

· Van Niekerk is correct in that publications are not obliged to afford a right of reply in respect of historical material referred to by way of contextual or background information only. Such an obligation would be totally unpractical; and

· It is a recognised principle in law that the repetition of defamation is also defamation or, applied to media ethics, the repetition of statements damaging someone’s reputation and dignity would also damage that person’s reputation and dignity – and would therefore also be in breach of the Press Code.

It depends, of course, just how the reportage is phrased – there is a clear difference in stating, firstly, that in the past there were allegations of sorts (which would be true, in the sense that such allegations have indeed been made), and, secondly, making such allegations (in which case it would not matter whether the allegations were new or not).

This office should indeed not give licence to the media to publish allegations in the public domain with impunity, simply because they have been published before, as Vale puts it.

Hyperlinked articles – subject to the Code?

The question is whether a hyperlinked article is subject to the Press Code or, put differently, whether this office has the jurisdiction to entertain a complaint regarding such an article.

For reasons which will become clear below, I am raising this issue despite the fact that deVere and Green withdrew their complaint regarding the hyperlinked article.

The Press Council has undergone some changes over the past few years, one of which is that its mandate has expanded from print media to online media as well. That brought some challenges, which included this very question: Does this office have a mandate to adjudicate hyperlinked articles? In other words, do the media have an obligation to ensure that such articles conform to the Press Code?

As the Press Council’s documents do not address this issue in particular, it is up to this office (the Ombud and the Panel of Adjudicators and Appeals) to interpret and to apply the letter and spirit of the Code in this regard.

Seeking guidance from various parties when I first encountered such a situation, especially from experts on online publication, I was rather surprised to find a unanimous response. The gist of their replies was that a link is a considered editorial decision to select and include that information,serving as an extension of the story itself.

This is the line I am following and applying in cases of hyperlinks.

Other issues

Two other issues remain:

· Van Niekerk’s argument about protected comment does not hold water – Section 7 of the Press Code, headlined Protected Comment, deals with editorials or opinion articles, and not with the reportage of hard news (which is the subject of this complaint); and

· It does not matter that the article did not “centre” on deVere and Green, as argued by the editor – even a casual remark may amount to critical reportage (and therefore is covered by the Press Code).

In particular

Critical reportage?

I now need to establish whether the statements in question amounted to critical reportage – because if it did, Moneyweb would have been obliged to ask deVere and Green for comment.

I have stated before that critical reportage can be defined in various ways, but it boils down to reportage which has the potential of causing someone harm – whether necessary, or unnecessary.

But first, let me be clear about when a publication is obliged to ask a subject of reportage for comment. Let’s say that South African cricket hero Hashim Amla scores a century in a test match against India: It is not necessary for the media to ask him for comment before reporting that achievement.

The reason for this is simple, but important: Because such reportage is not likely to harm him in any way.

This means that the media are not obliged to ask each and every subject of reportage for comment – only those who are likely to be harmed by reportage or, to use the Press Code’s phrase, who are the subject of critical reportage are.

I’ll now be looking through these lenses when adjudicating the merits of the complaint.

It may be helpful to summarise the statements in question:

· deVere stated publicly that it had provided “evidence of wrongdoing” to OffshoreAlert, and that “this case could turn out to be one of the largest financial scams in history”;

· “However”, it later emerged that the fund in question (the SGF) was actually a deVere vehicle (which was linked to Green);

· The only investors in the fund were deVere clients, placed there by deVere advisors who received large commissions for doing so; and

· Cosgrove and Kellermann claimed that they had been targeted in an “attempt to cover up the direct role that Nigel Green played in the losses to deVere Group clients and the exorbitant fees he (Green) personally received”.

It is my contention that the mere fact that these statements were reported, created the possibility of damage to deVere’s and Green’s reputation. It was critical reportage, indeed – which, in turn, warranted a right of reply.

Right of reply?

It is common cause that Moneyweb did not give deVere and Green a right of reply with regards to the article in question. But because the hyperlinked articles should be considered as extensions to the story itself, the next question becomes whether they did have a right of reply.

The first section

The first part of the story complained about, reads as follows: “In March 2015, international consultancy deVere went public on the fact that it had provided ‘evidence of wrongdoing’ in this fund to OffshoreAlert. A deVere spokesperson was quoted as saying that ‘we suspect that this case could turn out to be one of the largest financial scams in history’.

In one of the hyperlinks, published on 25 March 2015 and headlined, deVere reveals its role in exposing alleged investment fraud, a spokesman was quoted extensively saying exactly what was reported in this section of the article.

A right of reply, therefore, applies.

The second section

This part stated, “However, it later emerged that the Strategic Growth Fund was actually a deVere vehicle. It was managed by United Asset Management, a firm linked to deVere’s CEO Nigel Green, and the only investors in the fund were deVere clients, placed there by deVere advisors who received large commissions for doing so.”

Let me repeat, for the sake of clarity: The question on my table is not whether it was true or not that the SGF was “actually a deVere vehicle”; I am also not concerned with the question of whether it was reasonable to report it as such. My only question, in response to the complaint at hand, is whether deVere and Green had an opportunity to respond.

In the hyperlink which deVere and Green initially complained about (but later withdrew), the following was reported:

“Nigel Green and deVere would not respond to the specific allegations, but sent Moneyweb the following statement:

‘deVere Group does not consider it appropriate to comment on evidence gathered by any independent regulatory authority, especially concerning matters which are the subject of ongoing regulatory investigations and law enforcement investigations by the Guernsey Financial Services Commission and others. deVere will continue to co-operate fully with, and provide such assistance as may be required by, all concerned regulators, law enforcement and the administrators/liquidators appointed over the funds.

‘deVere strongly denies the claims made by Mr Cosgrove and Mr Kellermann, in particular that deVere or anyone on behalf of deVere had an input on the investment decisions of Strategic Growth Fund. At present there is a legal case progressing and several people have been arrested. It is therefore not appropriate to comment on the detail of the case. Our evidence supplied to regulators and other investigating organisations is very strong and we are able to defend it rigorously’.”

This should be regarded as a reply, in accordance with their right.

The remaining question is whether something new has happened on which deVere and Green should have been approached.

I therefore enquired whether the court case is still ongoing. Vale indicated that it is. Had it been concluded, I would have expected Moneyweb to have asked for comment – but since that is not the case, there would be no point of reply at this stage.

The third section

This section reported, “In mid-2015, Cosgrove and Kellermann raised these inconsistencies in a document that questioned the role deVere and Green had played in the allegations against them. They claimed that they had been targeted in an ‘attempt to cover up the direct role that Nigel Green played in the losses to deVere Group clients and the exorbitant fees he (Green) personally received’.”

This statement does not put deVere or Green in a bad light, and therefore did not necessitate a right of reply.

Finding

The complaint is dismissed.

Appeal

The Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.